By Mackenzie Tatananni
Couchbase stock slumped after the software company forecast less revenue than expected for the current quarter.
Shares of the cloud database platform were down 21% at $16.66 on Wednesday morning, on pace for the largest daily loss since June 7, 2023, when they fell 28%, according to Dow Jones Market Data. Couchbase stock has fallen 26% this year, while the S&P 500 gained 27%.
The slide came even though results for its fiscal third quarter, the three months through Oct. 31, were better than expected. Couchbase reported a quarterly loss of 5 cents per share, while the consensus call among analysts tracked by FactSet was for a loss of 8 cents. Quarterly revenue was $51.6 million, compared with expectations for $50.8 million.
The company said it expects fourth-quarter revenue of between $52.7 million and $53.5 million, missing analysts' expectations for $54 million. Couchbase also adjusted its fiscal 2025 revenue guidance, forecasting a result between $207.2 million and $208 million, compared with an earlier call for between $205.1 million and $209.1 million.
President and CEO Matt Cain noted that quarterly revenue was higher, and the operating loss smaller, than Couchbase had told investors to expect. "I remain highly confident in our outlook and ability to achieve our objectives in fiscal 2025," he said in a news release.
But analysts at Wedbush said the company's conservative fourth-quarter guidance overshadowed its top and bottom-line beats, noting a "murky macro backdrop" and slowing growth in net additions of new customers.
The firm upgraded Couchbase to Outperform from Neutral in October, when the company unveiled a suite of new products including its Capella platform, which optimizes the storage and processing of data. Earlier this week, Couchbase announced Capella AI Services, a feature intended to help businesses "address the growing data challenges of AI development and deployment."
"This quarter continues to show that the BASE growth story is in the early innings of playing out as its Capella platform will provide quicker monetization capabilities while driving efficiency in its business model," Wedbush analysts led by Daniel Ives wrote.
The firm maintains an Outperform rating for the stock with a price target of $26.
Guggenheim analysts said expectations had ben high ahead of the results, and that the tech company had failed to live up to them.
A team led by Howard Ma noted that company's total annual recurring revenue of $220.3 million was only in line with consensus and the midpoint of the range management had forecast. "Net new customers ticked down from a record 62 in F2Q to 34 during the quarter, while one-third of customers are now using Capella," the analysts said.
Guggenheim maintains a Buy rating and price target of $30 for the stock, based on Couchbase's value proposition and long-term positioning.
Competitors climbed as Couchbase fell Wednesday. MongoDB stock rose 6.3% to $344.42 while PTC jumped 1.1% to $202.44.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 04, 2024 13:15 ET (18:15 GMT)
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